According to a senior official, China’s Central Bank has completed work on a system based on blockchain technology, which digitizes the checks issued by local companies.
In a column published by local media on Tuesday, Dee Ganges (Gang Di), Deputy Director of the research laboratory of digital currencies the people’s Bank of China, said that his Department «has completed the development of infrastructure system based on blockchain technology and smart contracts, that issues digital cheques».
According to Dee, this system is the result of years of research and development, which started in 2016. Then the lab first announced its plans to study the technology of the blockchain in an attempt to solve the problem of trafficking of counterfeit checks in the Chinese market. Later it was reported that in January 2017, the Agency successfully tested a prototype in a virtual environment.
According to Dee, offline company in China accept for payment checks as money orders, which may be used to receive money for the amount in the Bank, or to pay for the services of other companies.
The obvious problem with the existing system — a large number of intermediaries who take on the role of traditional banks to issue cheques, and this carries additional risks of fraud. Subsequently, fake receipts can be distributed among commercial banks and potentially undermine the financial system of the country.
According to Di, the platform to achieve consensus with the use of PBFT (the algorithm of fault-tolerant type of problem Byzantine generals) can tokenservice checks, while the transaction can be controlled using smart contracts.
The main advantage of the system — giving the regulators a complete overview of the entire life cycle of the digital receipt, regardless of whether it is cashing or used as collateral for other corporate assets.